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Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

December 18, 2012

WSJ: Forget TPP's Threat to Medicines. "Free Trade is Good for Health!"

Today the Wall Street Journal published an op-ed with
the glowing title, “Free
Trade is Good for Health.” The piece
gussies up the Trans-Pacific Partnership
(TPP) as a healthy dose of medicine for the developing countries that are negotiating
the NAFTA-style deal with the U.S. and other Pacific Rim nations. The op-ed first takes on those who argue that
the TPP poses a danger to access to medicines (i.e. the major health and
development organizations from nearly every TPP country). It then frames the deal as part of a
benevolent “free trade” legacy which should be given unqualified credit for the
wealth health of nations. The
op-ed’s omissions in the first argument are as large as its sweeping
conclusions in the second.

The TPP’s proposed
intellectual property chapter includes even greater
monopoly protections for pharmaceutical companies than seen in past U.S.
“free trade” agreements (FTAs). The
extension of such anti-competitive protections, while safeguarding profits for
large pharmaceutical firms, threatens to block generics and elevate the cost of
medicines in TPP countries like Vietnam.

One such protection that has
been hotly debated within the TPP context is “data exclusivity.” The brainchild of the pharmaceutical industry,
data exclusivity goes even beyond patent protections by barring generic drug manufacturers
from accessing the clinical test data required to market cheaper, generic forms
of a drug, whether patented or not, for years.
Should we be concerned about the implications of such corporate
protections for the cost of medicines? Apparently
not. According to the op-ed, such
concerns are the handiwork of “scaremongering NGOs.” (I don’t recall that adjective making it into
our mission statement.) The author,
Philip Stevens, argues that data exclusivity for chemical drugs is currently
granted in the U.S. for five years, and “the chances that the TPP will lengthen
the exclusivity period are very low.”

But the point is not whether
the access-curtailing U.S. data exclusivity periods will be “lengthened,” but whether
they will be exported to ten other TPP negotiating countries. Also, the author neglects to mention the U.S.’s
new and significantly longer monopoly protection period of 12 years for
biologic drugs—used to treat cancer, heart disease, and other deathly
illnesses. Pharmaceutical companies and
their cheerleaders have been calling for this extreme, prolonged generics
prohibition to be spread to TPP members, diminishing access to life-saving
treatments from Vietnam to Peru.

Indeed, this corporate push was
recently emblazoned on the very same opinion pages of the Wall Street Journal, withformer
U.S. Trade Representative Charlene Barshefsky calling
for the U.S. to use the TPP to export its 12-year exclusion of generics for
biologic drugs. Our own Peter Maybarduk
retorted with a letter
to the editor, arguing, “It would be cruel to impose this rule on
the many people suffering from treatable conditions in the Asia-Pacific region
who cannot afford the extraordinary monopoly prices…”

While the TPP’s intellectual
property chapter could export the U.S.’s monopoly protections for
pharmaceutical corporations, the leaked
investment chapter would allow those corporations to directly challenge governments
for access-to-medicines policies that they allege as violating the monopoly protections. The Wall
Street Journal op-ed comes on the heels of Eli
Lilly’s announcement, detailed in our post last week, that the
pharmaceutical corporation plans to use NAFTA to directly challenge the
Canadian government before a NAFTA-created, three-person tribunal over the
Canadian courts’ decision to invalidate Eli Lilly’s patent. The courts made the decision after
determining that Eli Lilly’s drug had failed to deliver on promised utility. In response, Eli Lilly is demanding $100
million in taxpayer compensation.

As we mentioned,
but as the op-ed failed to, the TPP goes even beyond NAFTA in empowering
pharmaceutical corporations to launch such attacks on access-to-medicines
policies. NAFTA implies that a
corporation could claim “intellectual property” as an “investment” protected by
the deal, allowing it to demand compensation for government policies alleged to
be a violation of that “investment.” But
the TPP makes that possibility explicit by naming “intellectual property rights”
under the definition of “investment,” raising the prospect of an increase in
Eli-Lilly-like challenges to access-to-medicines policies under the TPP.

After wiping aside or
completely omitting these concerns that the TPP poses a sincere health hazard,
the op-ed author framed the TPP as the continuation of a “free trade” legacy
that has played a nearly unparalleled role in improving global health
standards. (That’s not my
near-hyperbole, but his: “there have been few more powerful forces for
improving health in the history of humanity.”)
He reasons that trade means growth in income, which means growth in
living standards:

Prior to the 1950s, the
majority of the world's population lived a precarious life as subsistence
farmers. Since then, the opening of global markets, first by the General
Agreement on Tariffs and Trade and then by the WTO, has transformed the health
prospects of millions by raising incomes. That, and not IP flexibility, made
decent food, sanitation, and new medical technologies available.

That's how the Asian
countries involved in the TPP—Malaysia, Singapore, Brunei and Vietnam—have
witnessed startling improvements in the health prospects of their citizens
since the middle of the last century. Singapore signed GATT in 1973, and by
1993 there were no import duties for any product except alcohol, tobacco and
automobiles, a situation that largely persists today. Singapore now surpasses
many European countries for life expectancy, with Malaysia not far behind.

Oh my. Where to begin? How about Singapore. The author’s poster child for the trade-equals-growth-equals-health
argument turns out to be a pretty counterproductive candidate. Stevens, the author, cites 1973 as the year
Singapore began opening the door to unfettered trade, with the door cast mostly
wide open by 1993. But the years of
highest growth for Singapore happened while the door was still closed. In the decade before 1973, Singapore’s
average inflation-adjusted GDP growth
rate per person was 9%. In the
decade following its GATT accession, that average growth rate fell to 6%. In the decade following the declared 1993
free trade finish line, Singapore’s annual per capita growth dropped further to
just 3%. One could be pardoned for
expecting Stevens to conclude from his Singapore example that nations looking
to boost incomes and health standards should reject across-the-board free trade,
not embrace it.

Singapore’s experience is not
unique. A study by Mark Weisbrot and
Rebecca Ray over at the
Center for Economic and Policy Research found that from 1960-1980, a period
characterized more by import-substitution than by free trade, Latin America as
a whole experienced a cumulative growth rate of 92%. But during the free trade era of 1980-2000,
the region’s cumulative growth plummeted to a measly 6% over the entire
twenty-year period.

Such
findings, like the Singapore data, do not necessarily mean that free trade
causes lower growth. Other factors could
of course be at play in this history. But
the facts show that the opposite certainly cannot be claimed. Free trade cannot be categorically credited
for higher growth, much less recommended as an unmitigated prescription for
better health. Op-eds making such a
sweeping claim would seem to be driven more by ideology than by evidence. Those struggling to pay for medicine in Vietnam
could probably do without more ideology.

Comments

Daniels was partners with longtime casting director Billy Hopkins and together they adopted and raised Daniels' niece and nephew. Since their breakup Daniels has been with Andy Sforzini (in purple), still raising their children.